EU claims pharma delaying tactics cost 3 billion euro

Pharmaceutical manufacturers have been criticised by the EU competition commission for slowing the entry of generic medicines to the market. It says that such practices cost EU taxpayers €3 billion between 2000 and 2007.

The accusations come in a preliminary report on the Commission’s inquiry into the pharmaceutical sector, which was launched in January 2008 to investigate why fewer new medicines are being brought to market, and generic entry delayed.

Raids on companies including industry giants such as Pfizer and GSK revealed documents that highlighted how the companies attempted to block the competition of cheaper generic drugs. Strategies included filing clusters of EU-wide patents for a single medicine, entering into long winded patent litigation with generics manufacturers, and intervening in national procedures for the approval of generic medicines.

Despite these practices, the prescription of generic medicines in the EU has saved tax payers €14 billion between 2000 and 2007, the report said. But it noted that generic drugs only account for 40 per cent of the EU’s market volume, compared to 60 per cent in the US. Richard Barker, Director-General of the Association for the British Pharmaceutical Industry, points out that the problem is not universal across the whole of the EU, with generic medicines accounting for more than eight out of ten UK prescriptions in 2007.

No individual companies were accused of wrongdoing in the report, and the Commission pointed out that it recognised patent law was essential to protect the 17 per cent of revenues that pharmaceutical companies spend on research and development.

Neelie Kroes, the EU’s competition commissioner, said competition in the pharmaceuticals market was ’vital’ for people to get affordable and innovative medicines. ’The Commission will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached,’ she said. The full report will be published in spring 2009 after a period of public consultation ending 31 January.